Buy HSIL; target of Rs 600: Mehta Equities

Mehta Equities research report on HSIL

HSIL Ltd is over 5 decades old largest Sanitaryware and container glass manufacturer in India with a strong presence in faucet segment, tiles and kitchen appliances. The company operates through its two divisions- Sanitaryware and Glassware. It has five manufacturing facilities at Bahadurgarh (Haryana), Somanypuram, Hyderabad and Bhongir (AP). The clientele base for both the segments are huge and diversified includes leading institutional of the country. The company is on rapid capacity addition mode across all product categories to maintain its leadership.

Considering the overall rationales, we believe HSIL stands out to be the leading player to capture the rising demand of sanitaryware in the organised space. With Govt focus on sanitation, high replacement market and expansion plans in place; HSIL gives a good investment opportunity for healthy returns. At the CMP, the stock is trading at a valuation of 17x to FY16EPS of Rs 18.8. Hence, we recommend to “Accumulate/Buy” with a target price of Rs 600 with medium to long term investment horizon and also expect the stock to be re-rated going forward.

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